Cenvat credit on direct dispatch to a job worker cannot be denied on unalleged grounds; extended limitation also failed.

Cenvat credit on inputs sent directly from the seller's premises to a job worker's factory under Rule 4(5)(a) could not be denied on a ground not alleged in the show cause notice, and the authority could not insist on proof of return within 180 days when that was not the original charge. The denial of credit was therefore unjustified. The demand was also time-barred because the credit was reflected in statutory records and there was no evidence of positive suppression, misstatement, or mala fide conduct to justify the extended limitation period. The impugned order was set aside and the assessee succeeded on merits and limitation.

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Issues: (i) Whether Cenvat credit was admissible on inputs sent directly from the seller's premises to the job worker's factory under Rule 4(5)(a) of the Cenvat Credit Rules, 2004. (ii) Whether the demand was barred by limitation.

Issue (i): Admissibility of credit turned on the scope of the show cause notice and the permissible use of Rule 4(5)(a) of the Cenvat Credit Rules, 2004 for direct dispatch of inputs to a job worker. A ground not alleged in the notice could not be introduced later to deny credit, and the adjudicating authority could not travel beyond the notice by insisting on proof of receipt back within 180 days when that was not the original charge.

Conclusion: The denial of Cenvat credit was not justified and the assessee succeeded on merits.

Issue (ii): Limitation was examined on the basis that the credit had been reflected in statutory records and there was no evidence of positive suppression, misstatement, or mala fide conduct justifying invocation of the extended period.

Conclusion: The demand was barred by limitation.

Final Conclusion: The impugned order was set aside and the appeal succeeded both on merits and on limitation.

Ratio Decidendi: A demand cannot be sustained on a ground not raised in the show cause notice, and the extended period cannot be invoked in the absence of positive suppression or misstatement reflected by mala fides.

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